As companies develop their risk management plans, there are certain types of employee risk that should never be overlooked.
Every company knows that people are its greatest assets. It’s true. Your people possess the ideas, skills and enthusiasm that will make your company successful.
Employing people and managing teams also introduces employee risk to the company’s overall operations. It’s not pleasant to think that your own employees could threaten the company’s interests, but it’s the reality of the modern business environment and it must be part of a sound risk management plan.
Specifically, there are two types of business employee risk that need to be considered.
In the workplace, fidelity refers to losses caused by fraudulent acts perpetrated by individuals. (Yes, we’re talking about crimes).
The truth is, in many cases, these losses are caused by the dishonest acts of a company’s employees. Today more than 90 percent of companies have had some type of employee theft. These activities have real implications for the bottom line. Companies still choose to think of their exposure with a lax attitude of ‘it won’t happen to me’. The reality of the situation is, it’s just a matter of time until it does happen.
At the management level, fraudulent activities are hard to address. Other than checking inventory records or acting on rumors, there are few ways to identify and tackle employee thefts. The best practice is to prevent. Have processes and protections in place beforehand.
Companies need to protect themselves against these potential losses as the methods of attack become more sophisticated.
Employment Practices Liability
Successful companies focus on empowering people and building teams. It’s a key step in achieving your goals. However, your employee practices can also introduce risk.
In every industry, employees who are angry, rightly or wrongly, are taking action against their employers. Common complaints include:
- Wrongful termination
- Failure to promote
- Poor training
- Sexual harassment
There are other workplace situations that we have seen come before the courts. For example, a recent legal case featured a “failure to hire” complaint where a job candidate who believed they had the right to a particular position took action against the potential employer for hiring someone else.
Similarly, companies are now realizing they are at risk when dealing with third-party activities, or relationships between employees and outside people. For example, if a courier visits your business and feels that he or she was unfairly harassed by one of your employees, your company may become the target of a harassment complaint.
Managing Types of Employee Risk
Successful companies are built on their people. They invest in them, help them grow and encourage them to succeed. It’s hard to plan for risks associated with employees and employment practices. But those risks are real. Proactivity is key. Understand the risks and take action to protect your organization.
To learn more about these types of business risk and how Trisura can help, contact us today.
Has your company encountered these types of business risk?
What solutions did you employ?
Are you prepared?